Early Richening Gives Way

Aussie bonds finally gave way to the move lower in U.S. Tsys during Asia-Pac hours, as futures relinquished their overnight bid and cash ACGBs gave back their early catch-up richening. That left YM +1.0 & XM -1.0 at the bell, while wider cash ACGB trade saw the major benchmarks running 1bp richer to 1bp cheaper late on.

• Local data had little impact on the space, with a marginally wider than expected monthly trade surplus accompanied by softer than expected import and export prints.
• NSW TCorp sold a cumulative A$600mn of Apr-29, Feb-30 & March-31 paper, which could have applied some hedging pressure to XM futures early in the day.
• Local news flow saw Treasurer Chalmers note that a decision will be made whether to reappoint RBA Governor Lowe in mid-2023 after consultations with the PM and cabinet. Chalmers said that the RBA review, set to be published in March, will be "relevant" to the decision.
• Bills were -2 to +1 through the reds, while RBA dated OIS was little changed, pricing 16bp of tightening for the Bank’s Feb ’23 meeting, alongside a terminal cash rate of ~3.65%.
• Friday’s local docket will be headlined by the release of the weekly AOFM issuance slate and A$700mn of ACGB Nov-25 supply.